The Securities Appellate Tribunal (SAT) today upheld Sebi's interim order that barred Grishma Securities and its four senior officials from the securities market for alleged irregularities in the initial public offer of Tijaria Polypipes.
SAT has upheld the ban against the stock broker Grishma Securities and its directors — Ketan C Shah, Chandrika H Gandhi, Chhabil C Shah — and its CEO Mihir Ghelani.
Earlier this month, the regulator had declined to revoke its interim order on the entities keeping in view the alleged role played by them in manipulating the IPO of Tijaria Polypipes.
In its order today, SAT said that the market regulator had brought on record " sufficient justification for continuation of interim order against the appellants (Grishma Securities, its directors and CEO)".
Noting that the investigation in the matter is over and Sebi is likely to issue a show cause notice within next two weeks, SAT said that "no case for intervention by the Tribunal at this stage is made out".
The IPO of Tijaria Polypipes was open between September 27-29, 2011.
Sebi had initiated a probe into the fall in price of Tijaria Polypipes shares on the first day of its listing, October 14, 2011.
Preliminary investigations revealed that Tijaria Polypipes had diverted substantial part of the IPO proceeds, "through layered transactions", to certain entities which had allegedly provided an exit to the retail allottees/qualified institutional buyers (QIBs).
Two such entities Jivraj Zala and Chetan Dave had traded through Grishma Securities in the shares of Tijaria Polypipes on the listing day.
Sebi alleged that Grishma Securities and its four officials allowed Zala to trade in the shares of the company "without meeting margin requirements, funded Zala's margin obligations from funds and securities belonging to other clients, falsified its client ledger etc."